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Tip 4: Focus Your Revenue Cutoff Testing

Article author
Jonathon Plowman-Samson
  • Updated

How does this add value to your audit?

  • Using the Data Table and the Filter Builder functionality, MindBridge allows you to filter transactions across a number of different data points in addition to the account (i.e., revenue). So in testing the cutoff of revenue around year-end, you can filter for any revenue transactions which are:
    • Within a certain number of days from balance sheet date; and/or
    • Trigger certain Control Points (i.e., Flow Analysis); and/or
    • Above a certain dollar threshold, i.e., Filter all revenue posted towards the end of the period, that is above materiality, to ensure Revenue Recognition criteria is met, and revenue is recorded in the right period.
  • Combining the results of a transaction-level review as described above together with in-app visualizations of revenue account trends over time and key ratios over time, you are able to get a more holistic picture of revenue transactions around year-end to help inform your testing strategy.
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